Aqua Metals, Inc. (AQMS) Q3 2021 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Aqua Metals announce a schedule for Third Quarter Financial Results Conference Call. At this time, all participants' line are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand over the conference over to your speaker for today, Mr. Glen Akselrod. You may begin.

Thank you, Operator. And welcome everybody to Aqua Metals Third Quarter 2021 Conference Call. Earlier today Aqua Metals released financial results for the quarter ended September 30, 2021. This release is available on the Investors section of the company’s website at www.aquametals.com. Joining us for today’s call from management is Steve Cotton, President and CEO; as well as Judd Merrill, the company’s Chief Financial Officer. During today’s call, management will be making forward-looking statements. Please refer to the company’s report on the Form 10-Q filed today, November 4, for a summary of the forward-looking statements and the risks, uncertainties and other factors that could cause actual results to differ materially from those forward-looking statements. Aqua Metals cautions investors not to place undue reliance on any forward-looking statements. The company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law. As a reminder, after Steve’s and Judd’s formal remarks we will take questions. Questions will be accepted over the telephone from analysts and all other investors can submit a question using the online webinar portal provided in today's and last week's press releases. We will take as many questions as we can in our available time slot. And with that, I would like to turn the call over to Steve Cotton, CEO of Aqua Metals. Steve, please go ahead.

Thank you, Glen. And welcome everybody to today's quarterly call. I’m going to start with Slide number 1, which is our title slide which is that Aqua Metals is truly leading a revolution in lead and lithium battery recycling. And today, we're going to be talking about our third quarter results. If you would like to have more in-depth view of our Aqua Metals, you can refer to our investor website and play back, register for and play back the presentation that we made last week which has more in-depth information. Today's call is focused on our quarterly results. Slide number 2, you will see the Safe Harbor that Glen just read, which I won't reread back to you and that's there in writing for your reference. Moving on to Slide 3, our mission. And our mission is to provide sustainable metal recycling for materials that are strategic for energy storage applications be it lead or lithium. Our proven breakthrough technology which we'll talk about today are to refining returns raw materials to the manufacturing supply chain in a clean way and in an economical way, it will help vastly reduce the reliance on mining to meet the growing demand for the lead asset and be it lithium-ion industries. Moving on to Slide 4. Change has really impaired us in the way that the industrial processes need to electrify and get away from fossil fuels and become the clean processes that support the clean initiatives. As you see in the right, the U.S. Department of Energy themselves has said that the vision is for global production of metals using just air, water, and clean energy as inputs. That's the only way we're going to drive towards net zero emissions which is quite the topic these days as we talk about global climate change in the recent top 26 meetings. So that change is impaired because today's small time producers' around 7% of global greenhouse gas emissions amongst other emissions. This is going to go up significantly if we don’t change and if we don’t make way that we recycle and even build batteries powered through electrical processes that are powered through from renewable energy. So these recycling technologies need to really be incorporated in order to complete that transition. So it's not just in the transportation sector and the energy storage sector but in the close loop of recycling. Moving on to Slide number 5. Let's talk about Aqua Metals milestones. And if you look at the left side, you'll see that the Company was found at not too terribly long ago on August 2014. And that's when we made our first prototype of an Aqualyzer which is our normal room temperature water-based organic biodegradable methodology with low emissions to recycle lead. In July of 2016, we commenced operations after building about a 135,000 square foot facility in the Tahoe Reno industrial sector. And after turning on that facility by October 2018, we became a North American certified lead supplier in ingot form to open as the largest battery companies in the world. And we produced about 35,000 ingots of AquaRefined lead in 2018 and 2019 and during that period of time we did reach 24 hours a day 07 days a week commercial proving ground technology deep risking operations with the commercial production of that capability to deliver those 35,000 ingots. By February of 2021, as a part of our transition from a capital-heavy proving ground mode to a capital-light mode of providing equipment and licensing which we'll talk about. We made an investment in LiNiCo which is a lithium-ion battery recycling company, we'll talk more about our relationship with LiNiCo today. In our recent press announcement today but at the time in February of 2021 we made that investment and we also filed a provisional patent associated with taking the AquaRefining technologies and applying them towards the goal of recycling lithium-ion batteries. And also, LiNiCo purchased the plant, the AquaRefinery, in a lease-to-buy scenario which we'll talk about an update on that front as that is progressive then. So in July of 2021, we established our first commercial agreement for AquaRefining with ACME Metals in Japan and that is a big milestone for the company because we are in the process of preparing to ship as a product which is a licensable products too this client and partner to develop AquaRefining in Asia Pacific region. August of 2021, we did complete our third generation Aqualyzer which we're able to rapidly iterate focused on innovation through the past year of 2020, which now triples the throughput over the first generation where we made those 35,000 ingots up to 1296 kilograms per day for Aqualyzer amongst many other improvements that allowed a part to be monitorable with our Pure Metrics software suite as well as additional electrical efficiencies and capabilities of that equipment. Recently, now on a today and moving forward basis where you see the green arrow, September ‘21, we completed the lab scale testing of our initial testing on the lithium-ion recycling technology. And by December of this year, we expect that we will be shipping the lead equipment and form of Aqualyzer and other supporting equipment to our partner in Taiwan. So very important milestone coming up this quarter as we continue to commercialize the lead recycling aspects while we continue to develop the lithium recycling applications. In August, we did -- we expect to do operational testing of our full-sized lithium-ion AquaRefining recycling unit in circuit and by January of 2023 we have the potential to deploy the first full-scale AquaRefining process for lithium batteries. Our ticker on NASDAQ is AQMS, we're headquartered in Tahoe Reno, Nevada, and again we were corporated in 2014, we have about 69.8 million shares outstanding. And our cash in hand which we just reported $11.7 million as of September 30 and Judd will speak more about our financials inclusive of the fact that the company is very strong balance sheet and importantly is debt free. Moving on to Slide 6. AquaRefining is really a de-risked technology at its core because we did produce those 35000 ingots and we expect to take the many principles from our AquaRefining for lead into the lithium-ion recycling aspects and apply what you see in the right, important aspects, which is room temperature, closed loop, recycle the chemical that you are using to do the recycling, with a fundamentally non-polluted process as I was speaking about before which is critical in order to make this transition to electrification and not only transportation energy storage but the industrial processes that support the production and recycling of those materials. We have a very strong patent portfolio which we'll speak to and we've commercially de-risked a lot of the aspects of the technology through the process that we've gone through that the state to produce our first product. Our solution is cleaner and more cost efficient in form of recovery as a recycling process. We also produce a higher quality product and we'll talk about how that applies to not only the ultra-pure lead that we produce as you see in the background on this picture while we make the metal one atom at a time through a continuous process but also apply that 99% plus, in the case of lead 99.996% plus of purities to expanding to other metals and plating those metals in the lithium space such as cobalt, nickel and manganese and even other products. Recent highlights from our quarter which we'll focus on today is that we did establish our Aqua Metals innovation center recently announced for the development of our lithium-ion battery recycling solution and utilizing that AquaRefining technology. That is just a less than a mile away from the AquaRefinery which is now the LiNiCo facility that is about to turn up as they migrate into next year with the lithium-ion at patent of the AquaRefining facility that we had just down the street there at Tahoe Reno Industrial Center. So we're very excited about that innovation center and the capability for us to rapidly innovate as we did with the Aqualyzer program over the past year for lead and get that lithium program where it needs to be. And we'll talk about how we're going to be doing that with the recent press release that we just issued this morning. It's completed the third generation Aqualyzer as I mentioned before and we achieved production at over 300% of the original model. We also finalized in the quarter a definitive agreement to deploy AquaRefining technology in Taiwan to ACME Metal which will be shipping as I mentioned earlier or later this quarter and partner with them to develop direct to oxide process, you can see that in a press release that we also issued about our direct to oxide capabilities where we can take what comes off of AquaRefining machines and bypass the whole [ingotization] process and take the briquettes that we make that we squish from the materials that come up with the Aqualyzer and put those directly into the battery manufacturing process. So we're very excited about our partnership with ACME to take that technology and bring that to the largest battery manufacturers in Asia Pacific whom they already have as clients. We had a signed collaboration agreement we announced today with LiNiCo towards the clean lithium-ion battery recycling technologies. We'll speak to that in the future slides so I would just point that out for now. We also received a $1.25 million payment recently from LiNiCo as part of the leased home and that is a non-refundable deposit for the purchase of the McCarran, Nevada, facility and that is the facility in Tahoe Reno Industrial Center. We also received a final insurance payment in settlement of $5.25 million and we achieved the total of $30.25 million collected exceeding the guidance that we originally provided on that process. We're required to have that completed and done and behind us. We also further advanced discussions with potential licensees and are very happy with our sales funnel as we continue to try to add additional AquaRefining applications or customers throughout the world. Moving on to the more details about the ACME Taiwan agreement on Slide number 8. You'll see that they are our first partner and really located in the largest and fastest growing global lead market. The market for lead is mature and it’s very large at around $65 billion for last the battery globally but it's growing fastest in the Asia Pacific markets simply because there's more industrialization, there's more cars getting through in the road. Many of those cars have two batteries, with the lead acid battery then inclusive of EV's that also have lead acid battery in them. And we're seeing quite a bit of growth in that market. This deployment will showcase our AquaRefining clean lead recycling in that market where these environmental drivers for not only building new facilities or retrofitting existing facilities are have been moving at a very rapid plus and we see a very strong bend towards the need to have environmentally clean capability fuel this rapid growth in that marketplace and capacitization, et cetera. This also unlocks an opportunity for future partnerships with these global battery manufacturers that are partners and clients of ACME Metal to develop that direct to oxide methodology and really take AquaRefining towards a much tighter leg between battery recycling and battery manufacturing. So stay tuned for more updates as we continue to make that deployment come alive in the coming months. Moving on to Slide 9. We'll talk about the collaboration agreement that we just announced today with LiNiCo. And Phase 1 and Phase 2 were defined here. Really, Phase 1, the focus here is immediately beginning to have LiNiCo process used lithium-ion batteries into what's called black mass and take that black mass into the Aqua Metals innovation center and process the black mass into those high-value metals that I was describing earlier. And we will be doing that in our innovation mode with not large amounts of material but meaningful enough of amounts of material to de-risk improve the technology. And support Phase 2 which is the goal for both parties where LiNiCo licenses AquaRefining equipment and technology and LiNiCo has announced that they have a potential to process up to 100,000 metric tons of feedstock annually of lithium-ion battery. So it would be one of the largest if not the largest battery recycling facility in the world. And we're very pleased that we'd established this collaboration agreement to get the lithium capabilities for AquaRefining mature enough to deploy into that Phase 2 as I mentioned earlier in the timeline in an earlier slide. So moving on to Slide 10. In order to support all these activities we have and continue to prosecute a very robust strategic intellectual property portfolio. And we feel that we are well protected in our equipment supply and global licensing efforts throughout the globe where you see blue, you see where we have issued and allowed patents that there are not pending and you'll see in the light blue and blue that we have additional pending patents. We've now achieved 71 total patents that have been issued and allowed where 44 additional applications that are pending inclusive of lithium-ion at our patent AquaRefining related IP that I mentioned earlier that we filed that key provisional patent for just a couple of months ago. So with that I'm going to turn it over to Judd Merrill, our CFO to talk through the financial overview. Go ahead, Judd.

Thank you, Steve. I will share a few comments related in each of our financial statements. First on Slide 12, on the balance sheet. As in September 30, 2021 cash and working capital balances were $11.7 million and $10.3 million respectively. Over the last three quarters, we have consistently maintained cash balances over $10 million. This ability for us to maintain a stable cash balance is partly due to the sale of the building insurance proceeds and our reduced cash spend. We've accounted for certain items, asset items, with the net book value of $3.2 million at asset held for sale these are non-core assets and are no longer necessary for future operating plans. As mentioned in the prior quarter, we accounted for the lease-to-buy agreement with LiNiCo at the sales type lease. As a component of the accounting for this agreement, we recognized the estimated fair value of the land and plant of approximately $70 million as a leased receivable. Subsequent to the quarter end, LiNiCo made their first required deposit of $1.25 million. The deposit is non-refundable, however, it will be applied to the purchase price of the building at the time the amount is paid in full. Lastly, accrued liabilities includes approximately $2.3 million in remaining cost to repair the plant from the fire damage and again very close to completing the restoration of the plant from the damage and it's looking very good and we're pleased with the progress. Most of the building is ready for LiNiCo to start moving equipment in. And we anticipate that by the end of the year, the whole building will be available for their use. Moving on to the next slide, the income statement. Cost and product sales increased approximately 2% and 23% for the three and nine months ended September 30, 2021 respectively. As compared to the three nine months ended September 30, 2020 where increase in cost of product sales for the nine months was a result of plant clean-up costs in preparation for the lease and the eventual sale facility. Research and development cost included expenditures related to improvements on the AquaRefining technology related to our lead recycling process as well as initial development of our lithium-ion battery recycling process which we are focused on and expect additional spend in the coming months. General and administrative expenses increased approximately 62% and 13% for the three and nine months ended September 30, 2021 respectively, compared to the three and nine months ended September 30, 2020. The needed G&A increased in Q3 2021 as compared to Q3 2020, the dues were non-cash stock-based compensation credit that we recorded in Q3 of 2020. Overall, our G&A expense has been fairly consistent over the last two years averaging approximately $2.3 million for quarter. Now, which this number does include both cash and non-cash items. During the quarter, we reported other incumbent insurance proceeds and net of related expenses, this is related to the final insurance payment that we receive the $5.25 million during the third quarter. We also recorded a $1.4 million our loss on the disproval of certain fixed assets. And net loss for the quarter was a negative $1.386 million and the basic and deluded net loss per share was a negative $0.02. My final comments around the cash flow statement. Net cash using operating activities for the nine months ended September 30, 2021, was $3.8 million that as compared to $9 million for the nine months in September 30, 2020. Cash using operation was positively impacted by cash inflow from insurance proceeds offset by cash G&A, cash operating expenses and cost related to clean up our plants. However, based monthly cash needs for basic G&A and basic operating costs continue to be approximately $700,000 per month. We don’t see that growing in the near future even with adding new hired and strategic consulting which will add then strength to our team, we believe that those costs will be partially offset by reduced cost elsewhere such as reduced cost on as we move out of the plants. Net cash using investing activities for the nine months ended September 30, 2021, was $1.45 million. And that consists in mainly a $1.7 million for the purchase of property plant and equipment, $0.3 million proceeds from the sales in equipment, and $0.2 million utilized towards the investments in LiNiCo earlier this year. Net cash provided by financing activities of $10.4 million for the nine months ended September 30, 2021, consisted of $9.3 million net proceeds from the sale of Aqua Metals shares pursuant to the term, and $0.7 million of proceeds from stock options exercised. The majority of the ATM proceeds happened in Q1 with the small portion of just over $1.5 million collected in Q2. On the report that during no use of the ATM in Q3 nor subsequent to the end of the quarter to this state. And those are my final comments on the financial statements. I will now turn it over to the moderator to begin our question and answer portion.

Thank you. [Operator Instructions] Here first question comes from the line of Amit Dayal from H. C. Wainwright. Please go ahead.

Thank you. Good afternoon, everyone. Thank you for taking my questions. So Steve, with respect to your shipments and deployments at ACME, are these guys getting the third generation solution or are they getting a prior version of the Aqualyzer?

So, ACME Taiwan to get the latest incarnation of the technology and we'll continue to work with them to even further improve technology over time.

And you -- should we expect Aqua Metals to receive something from this shipment or deployment in the fourth quarter of '21 in terms of the release?

The materials are going to be shipping by the end of the fourth quarter and need to get across the et cetera and get there and get installed and we're working towards what I've characterized before as a modest amount of payment ultimately for the equipment as well as we will be once we get the equipment installed and commissioned be receiving payments for the material that is produced. But again the guide on that is not going to be a material amount of revenue for the company in the early phase, the key is to get the material coming off of the equipment and the large battery manufacturers to work on that direct offside building.

Understood. And with respect to other potential customers are dividing on bids in terms of any pilots or any other progress not made in terms of securing new contracts with new customers with this?

Yes. So we, as I mentioned in the call, I'll have a good sales funnel and we are very pleased with the global nature of the sales funnel and are intending to add one to two additional licensees in the coming year. And Aqua Metals is going to be certain that we select and a licensee that selects us, whereas a good match for both parties. And that is what we're really solving for and we work through in, would ask everybody to stay tuned for updates on that.

And with respect with the LiNiCo partnership, are there any near-term milestones that we should be looking for or and then maybe it's an adjacent question to that is -- what kind of resources as do we now have to commit, it looks like it's becoming a more serious effort to compare to the announcement earlier in the year. Do we need to allocate more resources as this picks up or should we think about the CapEx or the investment requirements to bring this to market?

Yes. So, as Judd mentioned, we're shifting our cost structure from the transition of the AquaRefinery to LiNiCo that's taken over the AquaRefinery and applying some of those towards the or that capability enhancements from what we've already enhanced within the organization from an engineering science designed, process engineering, et cetera, perspective as well as even commercial resources and other consultative resources that we're working with to develop the lithium space. But still, not as Judd characterized, not really of that bill amount of uptick in our burn rate to do so. Because we're transitioning those costs. And you asked also about the milestones expected in the near-term. As we continue to develop our technology now with the sourcing of the black mass material which is post broken and separated with used lithium-ion batteries that become a black mass which has those high-grade metals in that. We'll be receiving that material soon and will be able to process that material through our pilot sales and begin to share with the market place. In summary, what we've been able to create and what kind of purity of what metals we've plated show that and obviously get into more details with LiNiCo in terms of this specifications, the evaluations, those materials that come off of our machines. And that will happen on really if you look at the timeline on our website, as we round the bend and to the next couple of quarters, you'll one more evidence of that progress of that technology. I'll like to remind everybody that nobody's really shown hydrometallurgical processing for lithium-ion batteries, a substantial amount of material to-date. And we think that with our partnership with LiNiCo, together we are going to be ahead of the general curve of the industry. Because there is a building, there is plant and equipment going in and we have our innovation center, we could begin moving materials practically upon commencement of the signing of our agreement. So, we're very excited about that. And then as you look at our timeline in the website, you'll see through the process of the year we'll have further full-size pilot sales running towards the end of the year with the intent to begin deploying them as we round the bend into 2023 for production scale.

Understood. And that's all I have, I'll take my other questions offline. Thanks, Steve.

Thank you, Amit.

Your next question comes from the line of Colin Rusch from Oppenheimer. Please go ahead.

Hey guys, this is Brandon on for Colin. First and formally, is an $11.7 million of cash on hand. Please walk us through your plans to fund the business for the end of '22?

Yes. So, we did have the $11.7 million scenario quarter, we did receive another $1.25 million in the building sale. There's another deposit of $2 million that's due next year, so there was some additional funds from the building sale that's coming in. LiNiCo doesn’t have the option to pay that off sooner, so it's another $12 million plus $13 million or so that we could receive next year that you have the option to wait till the first quarter of 2023. So, there is some additional funds coming in from that. So, that's the funds we have on hand and some of the revenue that we expect towards the end later part of next year the current spend rate that we're on in terms of our needs for G&A and for the operating in R&D costs that we have in front of us. We thought we have enough funds to take us through and into you 2020, 2022.

Aright, thanks. I'll then just as a follow-up. I know you touched on the of data segment now. If you could provide just and a little bit more incremental color on the pace of the lithium recycling process development. And then maybe kind of a target in terms of what we expect as the present commercial process on that front?

So, yes. The pace is rapid with the lithium recycling technology. One thing we really learned in 2020 was without the distractions of operating the plant of the full-size AquaRefinery to demonstrate in the proving grounds of our technology. We were able to focus and tactically 100% of our engineering efforts towards innovating and as evidenced by iterating our Aqualyzer product twice for doubling and tripling of capability, let alone the Pure Metrics software and monitoring and connectivity in automation and controls. So, we've taken that towards our capital-light model of rapidly innovating application of AquaRefining technologies towards multi metal recovery for lithium. And that's why we're doing that in the innovation which is a relatively much lower capital risk that took focus on innovation and then work with LiNiCo and other industry to take our technologies evaluate the output and the integration with their processes and put them in their more capital-heavy throughput place of taking business model or taking in feedstock and producing metals and selling those metals where we monetize and really unbound geographically through our equipment supply services and licensing business where we can work with multiple parties. But we're very pleased with our evolving partnership with LiNiCo that we can hit the ground running and really make 2022 a banner year for the progress not only for Aqua Metals but also lithium-ion recycling in general. So, that's a real strong innovation deep focus on that innovation side of the business which is what our business model is related, became capital-light model.

Okay, thanks so much.

[Operator Instructions] Your next question comes from the line of Shawn Severson from Water Tower Research. Please go ahead.

Hi, thanks. Good afternoon, everyone. Steve, I wanted -- are there any real technology for this black to lithium-ion recycling, these AquaRefining refining technology. And then, if we're looking at and kind of getting from where you are today to really implementation and commercial scale. What is left to be done from a technology standpoint?

Yes, Shawn. So, really kind of what we've done before with AquaRefining for lead and the extraction of lead through AquaRefining technologies where -- you have to de-risk the technology by operating on smaller units and then going to a full-size unit and then getting those at operating in a full-scale facility. And one thing that we learned from our development of Aqua Metals is we spent $200 million building a full-size plant and getting that scaled and having those distract, we think that by removing some of that distraction in capital-heavy focus, we can continue to de-risk the technologies we offer the process engineering and design is there and it's we're very confident in our ability to extract the metals that we've named that we would be extracting. And we've done some very significant metal separation and extraction already. And now it's taking that and giving that into this pilot sales and getting those operating and getting everybody comfortable with the process flow and going towards the full-sized scale. So, there is still de-risking to do as the lead technology has been de-risked because we commercially produce 35,000 ingots. That's further along and that's really our workforce in our licensing deployments. But we really do see a rapid path for us to do our on-core, do it much more quickly through the things that we've learned in the past.

Well, next question. If you can look in a crystal ball, maybe a little bit here and I know it's a tough question. But when you look at lithium battery industry related to lead batter industry, look at adoption rates and focus on carbon reduction and things like that. Do you think that they'll, how do you think it'll unfold in lithium-ion relative to how it did and driven as billion I should say in the lead side and maybe then twist and say grow much faster or is it kind of through the same process or what are your thoughts?

Yes. Its two very different industries, look Shawn. So, one is the existing lead acid industry where we're working with the industry players that are leading in that space to upgrade from a hydrometallurgical fossil fuel based method recycle. But a mature recycling closed-loop which is a great thing that the industries accomplished but really taking that towards an electrified clean process that protects workers, the environment creates ultra-pure products. In the lithium space, it's a nascent industry and it's growing in a very much more quick tune with annual growth rate by mid-to-date decade, it will certainly become a larger industry than the lead recycling industry. But there is a lot of work to begin between now and we're looking forward to working with everybody in the lithium recycling industry to make sure that we build together the best possible solutions there. Because as I mentioned in our presentation, if we don’t get this right as an industry and really as a global effort to electrify our processes throughout the world, we're not going to succeed in addressing global climate change at a fundamental level. That's why we're doing these, that's why we're electrifying industrial processes, which is exactly what we're trying to do with our methodology and techniques. So, it's really a difference where you see an industry that is looking at an upgrade in the lead space and industry that is getting built really from the ground up in the lithium recycling space. Hopefully that answers your question?

Yes, it does. And when you look at -- when you look these customers in the lithium-ion space, and obviously you're looking at electric vehicles and sort of related products. But if you're looking at the carbon footprint focus, I would think it'll be very high there. So, my question is if you, how well if somebody do fit in adopt this AquaRefining technology for this, what else would be other solutions or that they will be looking at. Is this something where one adopts it everybody has to adopt it to kind of keep pace with keeping carbon reduction on track?

Yes. So, in order to reduce carbon output and decarbonize, you can't burn things. And so, that the smelting methodologies will likely yield to the hydrometallurgical methodologies. And there are kind of standard hydro as we characterize it, that's available which is precipitation based and ours is more about metals plating. And recycling the chemical that you use to do the recycling which also has a de-carbonization benefit in and of itself. And so, we do see that the less things that we burn that are fossil fuels equals better and we see that our application of AquaRefining in our methodologies of the hydrometallurgical can really be an enabler for everyone that's in the industry whether you're recycling today through a hydrometallurgical technology that could be complemented through ours or a pyro technology or smelting with we can literally attach and bolt-on and are ultimately replace this smelting capabilities with a much cleaner way of doing this as we go into the future.

Okay, thanks. I'll take the rest of my questions offline.

There are no further questions over the phone at this time. I would like to turn the call over back to Mr. Glen Akselrod. Go ahead, Sir.

Thank you, Erica. Steve, is there some questions that have come in online. So, I know much of them have already been addressed in this call but I'll ask some which you could comment on. Has BASF aided Aqua with other potential global prospects for lead refining?

Yes, so our work with BASF has in fact built up our sales funnel and helped us with the engagements. And so, we're enjoying working with BASF to continue to promote AquaRefining into the lead asset industry. We'll obviously be also working with BASF with the system till of the key chemical in our AquaRefining electrolyte which is the other aspect of our agreement as we ship and deploy and get the Taiwan operation up and running. So, we'll begin to transact with BASF in that front. And then lastly, we're constantly exploring technological opportunities which was the third element of our partnership with BASF not only to improve AquaRefining for lead but even to potentially explore AquaRefining applications for other things and obviously BASF has interest in lithium recycling and so is Aqua Metals. And therein lies opportunities for the company's to discuss additional possibilities of ways to work together. So, all-in-all we're very pleased with our relationship thus far with BASF and our partnership with them.

Super, thank you. One more question here. How does AquaRefining ignore non-targeted metals in the feed?

So, what we do with AquaRefining as we go for lead for example, is that there are some metals that with that will dropout from that and then end up in the residue a very small amount because lead acid batteries for example are very much lead-centric in terms of the mineral that's in those batteries. But there are things like silver and bismuth and a couple of other items that we don’t plate and it's because we don’t plate them. And will apply the same when we look at what we do plate in the lithium multi-metal recoveries is that we will plate in a pure form the metals that we're going after and any metals that we're not going after we'll ultimately is messing the residue but that'll be a very small percentage when you look at the added effect of the metals that we are going after.

Thank you. One more question here. I guess in 2022, when do you first expect to start to receive the licensing payments, is it a quarterly annual basis?

So, we expect to receive that the first running royalties on the Taiwan installation relatively soon after we turn the equipment on. Again, the volumes won't be a large amount but the binary did Aqua Metals collect running royalties or not, answer will be yes. And we'll begin collecting those revenues in that form. So, we definitely in near first half of '22 certainly will be receiving those payments and be able to report that we have received those payments.

Super, thank you. I have no further questions in the online queue, Steve. So, maybe some closing comments and then we'll end the call.

Yes. I appreciate everybody's time here and I'll reemphasize that the Aqua Metals business model is really to enable all the battery recyclers whether it's lead or lithium-ion battery recyclers with key and core technology. And as we demonstrated with our lead efforts that's far to date in our first licensing in Taiwan, that gives us a good opportunity to enhance that further as we've evidenced today with our relationship with LiNiCo which the both parties intent to lead towards the licensing and enable us the LiNiCo to be successful. And we want to be the suppliers of the best-in-class and best available technologies for all battery recycling. And we feel that we are in a great business model, great cash position, great organizational capability to achieve new goals and really work with the industry to make the world a better place through the electrification and de-carbonization efforts that we're all trying to do here. So, I appreciate everybody's time and support and look forward to further updates in the near future.

This concludes today's conference call. Thank you all for joining. You may now disconnect.